You're Fired!

Capt. Donald Babcock, the Navys LCS program manager, was relieved of his duties Jan. 29 by his boss, Rear Adm. Charles Hamilton who also is being reassigned. Hamilton relieved Babcock due to loss of confidence in his ability to command, according to a Navy source, who added that Babcock would be reassigned to administrative duties.

Both men got their pink slips after an audit revealed that the Lockheed Martin version of the LCS would come in at around $400 million, nearly double the target cost. Two weeks ago the Navy suspended work on the second LockMart LCS for 90 days, long enough to get new managers in place and, hopefully, put the fear of God in Lockheed Martin.

With 55 ships planned, the LCS is a lynchpin of the Navy's future fleet. The class is designed to work close to shore at high speeds and to carry "modular" weapons and sensors packets to enable it to swing between missions. The idea was to populate coastal waters with large numbers of LCSs anchored by a Zumwalt-class land-attack destroyer. But that concept is in jeopardy if the Navy can't keep down costs on both ships. Already the first Zumwalt is careening towards a $3-billion pricetag. Toss in cost overruns on the LCS and the Navy's future surface fleet is dead in the water.

Far from being discouraged, naval analyst Bob Work sees the pink slips and the work stoppage as positive signs. "The Navy needed to say it had a problem. The second thing they had to say was that we have to build affordable ships. Mullen has shown that he is dead serious about doing that."